Dominic Young

Earl Wilkinson’s blog about the future of community media adds an important voice to a growing cacophony. We have heard the bad news about cuts from the LA Times, Sports Illustrated, Pitchfork, and Reach in the UK — just the latest in a long and gloomy line. Many news media organisations seem to have entered their final, terminal, phase.

It’s time to offer some hard truths about how we got to this point, but also some reasons for optimism.

Truths first. News media cannot thrive, or even survive, if they depend on advertising revenue. We don’t even need to go into the reasons; just look at the numbers. Ad-dependent media are starving to death.

That leaves consumer revenue as the best hope. The slow dawning of this realisation, though, has not been met with energetic innovation and growth. The way the news industry has gone about trying to make it work is, to be blunt, insane.

We are, by nature, a mass-market category. News thrives on universal availability, as commonplace and easy to buy as candy and soda. Most users have many interests, especially online, and few of them limit their media consumption to single products.

Which makes it odd is that we chose subscription, near-universally, as our consumer monetization model.

We didn’t do this because we had analysed and understood user needs, and designed a solution which was the best fit. We did it because that’s what everyone else had done. The idea that we could design a business model to suit our products and our customers, seemingly, did not occur to anyone.

That’s why it hasn’t worked very well. On the plus side, subscribers represent a recurring revenue stream — until they cancel.

Less positively, people really don’t like subscribing to news products. Conversion rates of 2% of audience are considered good. Ignoring 98% of what used to be a mass market doesn’t feel optimal.

The fact that some subscribers will always cancel doesn’t make it any easier. When they do, their recurring revenue drops to zero, and we lock them out. They are now banned from a product they once liked enough to subscribe to. It’s a wasted opportunity.

Adding to our woes, new subscribers get progressively more expensive to acquire and are worth much less, thanks to discounts. Eventually, subscriber numbers start to shrink, and ARPUs shrink faster as high value early subscribers are replaced by lower value new ones.

Even worse, we can’t take advantage of the network opportunities that the internet now provides, and retail outlets used to give us. We’re all selling our lonely, singular, products in our own sparsely stocked internet shops. Persuading people to enter, far less subscribe, is tough. Even mega-brands struggle with this. What chance does a community newspaper serving a few hundred thousand people stand?

It’s no surprise that titles are collapsing, especially the smaller ones serving smaller audiences.

One thing the industry is stubbornly resistant to is trying new things. “If something hasn’t already been done, it won’t work”, seems to be the prevailing industry attitude. It’s worth noting that this was also the prevailing attitude to heavier-than-air flight for a long time.

Media companies regard the 95%+ non-paying audience with seeming indifference. They’re not worth anything, so they are looked on with sad resignation.

I see them as an opportunity. A huge opportunity. How could they not be? What other businesses lock out 95% of their would-be customers? Salvation is right here, crowded outside paywalls, within easy reach.

If there was ever a time to start converting them to customers, it’s now. Just copying what everyone else was doing, or following the Google and Facebook Pied Pipers, is what got us into this mess. It’s not going to get us out of it.

Start with your users and what they want. Then think about what you would like them to do that doesn’t conflict with that. Not everyone wants to be a subscriber. You need to offer other options too.

Work out how you can get more people to become customers. Here are a few suggestions:

– Anyone who wants to, should be able to get your product whenever they want to.

– Everyone should pay.

– Get rid of walls, as much as you can. Sign-up, registration, subscription. Absolutely minimise the barriers between someone’s desire for your product and their spontaneous ability to access and pay for it — and make it a better product to attract more customers (and money).

– Stop locking users away. Accept that users want to move around and don’t want to be “owned”. Refusing to “share” them with other businesses, even competitors, just diminishes the market for everyone and hands them back to the trillion-dollar platforms which have been at the heart of our demise.

I started a company to address these points, because publishers need a solution which goes beyond the no-win subscription/advertising dichotomy. This is not a sales pitch for that company; it’s a call to action for an industry that is struggling but doesn’t need to be. As well as talking and writing about the issues we face as an industry, I started my company to help solve them.

If the industry can make consumer payment work the way consumers want — by removing the barriers and making paying for news a spontaneous, frictionless process — we will not just save a few publishers from their otherwise inevitable demise. We’ll reboot the entire economics of news.

That’s because, although we’ll have given up the certainty of recurring revenue from our new customers, we’ll also have removed the limits on how many customers we can have and much they can be worth to us. The more often they transact, the more they’ll end up spending. Rather than a fixed and limited opportunity, there will be an expanding one in front of every publisher. Collaboration and user-sharing will be a form of marketing, not a risk to the business.

The startling thing so far has been the reluctance of some publishers, even in the face of imminent cutbacks and death, to deviate from their own repeated failures.

Now that so many are in their terminal phase, though, it is the time for radical efforts.

I can help. Please come to me and I’ll be more than happy to do a proper sales pitch. But please, please, don’t do nothing.